Before understanding equilibrium, you must understand utility. Utility is the want-satisfying power of a commodity. It is subjective and varies from person to person. Concepts of Utility
Condition for Equilibrium: MUXPX=MUMorMUX=PX×MUMCondition for Equilibrium: the fraction with numerator cap M cap U sub cap X and denominator cap P sub cap X end-fraction equals cap M cap U sub cap M space or space cap M cap U sub cap X equals cap P sub cap X cross cap M cap U sub cap M If we assume util for $1, the equilibrium condition simplifies to: MUX=PXcap M cap U sub cap X equals cap P sub cap X If consumer equilibrium class 11 notes free
The consumer will allocate income such that the last rupee spent on each good yields the same marginal utility . Before understanding equilibrium